-LRB- CNN -RRB- -- A Canadian subsidiary of a U.S.-based multinational firm pleaded guilty in federal court Thursday to illegally sending software to China , which it used in the development of its first advanced attack helicopter , according to the U.S. attorney in Connecticut .

Pratt & Whitney Canada -- a subsidiary of Hartford , Connecticut-based United Technologies Corporation -- pleaded guilty to violating the Arms Export Control Act . In a case going back more than a decade , the firm admitted it sold software that was used in the development and testing of the new Z-10 helicopter for China 's army .

UTC , Pratt & Whitney Canada and another UTC subsidiary -- Hamilton Sundstrand Corporation -- agreed to pay more than $ 75 million as part of a settlement with the U.S. government because of the arms export violations and for making false statements , according to a statement from U.S. Attorney David B. Fein and other federal officials .

The firms are expected to pay $ 20.7 million to the Justice Department and another $ 55 million to the State Department `` to resolve outstanding export issues , including those related to the Z-10 , '' court documents said .

`` This prosecution is one of the largest resolutions of export violations with a major defense contractor in the Justice Department 's history , '' Fein said .

Federal officials blasted the firm , saying the case `` is a clear example of how the illegal export of sensitive technology reduces the advantages our military currently possesses . ''

`` American military prowess depends on lawful , controlled exports of sensitive technology by U.S. industries and their subsidiaries , '' added John Morton , director of U.S. Immigration and Customs Enforcement -LRB- ICE -RRB- .

According to court documents , an internal e-mail from a senior manager in September 2001 suggested that officials at Pratt & Whitney Canada knew the sales could violate U.S. sanctions .

`` We must be very careful that the helicopter programs we are doing with the Chinese are not presented or viewed as military programs , '' the manager 's e-mail read , according to the documents . `` As a result of these sanctions , we need to be very careful with the Z10C program . If the first flight will be with a gun ship then we could have problems with the US government . ''

The contractor was allegedly trying to outflank its European rivals and develop a foothold in the lucrative Chinese civil helicopter market , thought to be worth up to $ 2 billion in the coming years , the documents added .

An internal briefing from September 2002 noted that `` China 's civil helicopter market potential is large -LRB- estimated at close to 20,000 aircraft by some -RRB- . ''

Chinese officials allegedly `` made it clear that if -LRB- Pratt & Whitney Canada -RRB- wanted to have its engines considered for the yet-to-be-developed civil version , it would have to provide its engines ... with the understanding that the initial application ... would be military , '' the documents added .

But the firm allegedly `` turned a blind eye to the attack helicopter application and went along with the ` sudden appearance ' of a parallel civil program . ''

United Technologies says it accepted responsibility `` for these past violations and we deeply regret they occurred , '' noting that it has `` invested more than $ 30 million since 2006 to strengthen its compliance infrastructure . ''

`` Export controls are an integral part of safeguarding U.S. national security and foreign policy interests , '' said CEO Louis Chenevert . `` As a supplier of controlled products and technologies to the Department of Defense and other domestic and international customers , we are committed to conducting business in full compliance with all export laws and regulations . ''

The United States has imposed sanctions on the sale of military technology to China since 1989 , after pro-democracy protests in Beijing 's Tiananmen Square were crushed in a bloody Chinese crackdown . Congress strengthened sanctions less than a year later , specifically naming helicopters and helicopter parts in the ban .

The Z-10 helicopter is in production and started being used by China 's armed forces in 2009 , according to the Justice Department .

It is capable of being equipped with 30 mm cannons , anti-tank and air-to-air missiles , and is primarily intended as an anti-armor attack craft , according to federal officials .

Christopher K. Johnson , a senior adviser at the Center for International and Strategic Studies , said the case `` highlights our issues with defense cooperation and competition with China . ''

`` This is just another signal that those issues and tensions are unlikely to go anywhere , '' he said .

CNN 's Leigh Remizowski contributed to this report .

@highlight

Military technology was illegally sold to China by an American multinational firm

@highlight

It helped China develop and produce its first advanced attack helicopter , U.S. officials say

@highlight

United Technologies Corporation agrees to pay more than $ 75 million as part of a settlement

@highlight

Pratt & Whitney Canada pleads guilty on Thursday to violating the Arms Export Control Act